Asking the right questions about high gas prices

The notion of “peak oil” — which holds that the world’s production of oil is at it’s all-time high this year, or within a few years — has recently become credible in the business community. While most everybody will agree that petroleum is a depleting resource with a limited supply, the question many now wrestle with is: “How much more oil is there left in the ground?” Considerable debate wages about the real level of petroleum reserves, and how many more years it will last.

Unfortunately this discussion is a distraction from the practical questions that business managers should be asking. A much better question to ask would be: “How much longer will it be before our organization starts to suffer serious adverse impacts because the world supply of oil is dwindling?” When I make reference to serious adverse impacts, I am talking about, among other things, rapidly escalating costs associated with petroleum fuels, and fuel shortages occasioned by geo-political events such as resource wars and embargos.

The Town Talk